Collaboration with end customers will increase commercialisation and translation
The resources sector is becoming increasingly knowledge-intensive. Significant industry challenges can only be solved by companies across the value chain collaborating, generating new and innovative products, and accelerating technology adoption. Leveraging and translating Australia’s world-leading resources technology innovation will also support more efficient forms of mining and processing. This is vital to ensuring the future competitiveness of Australia’s critical minerals processing industries.
A key step in commercialising a resources technology is convincing an end customer that the technology being offered will provide real value to the company using it. For example, a sensor is only of value to a company if it is integrated with a platform for analytics or combined with an engineering solution that helps customers optimise their processes. This often requires close collaboration between the technology provider and the end customer.
While there is a large amount of collaboration between companies, the focus is largely on meeting the needs of a single customer such as a large resources firm. This is a missed opportunity to offer technology products and services to the broader commercial market. To grow the sector, technology companies will need to change their business model. This could be by designing their products to service a range of clients or by commercialising their technologies to sell to a larger group of customers. This will help those companies bring their products more quickly to market, build their customer base, attract finance and build scale. Increasing collaboration will also help to build a more open marketplace which supports technology companies to grow.
Success in this high-value manufacturing area requires demonstration of capability to meet customers’ rigorous, and often custom specifications. Resources companies are typically very conservative and often slow to adopt new resource technologies unless they can be de-risked by demonstrating their performance. Application of resource technologies to other sectors may also require adaptation to deliver on the needs of new customers. Australia currently lacks test mines and facilities, which allows this demonstration to occur, which slows the timelines for getting products to market.
Demonstration of processing capability is needed to integrate with domestic and international supply chains
Generating more value from our critical mineral resources relies on processing ores onshore rather than overseas. However, critical minerals processing can be highly customised, technically complex and risky to implement. This makes securing offtake agreements and project finance difficult.
The ability to demonstrate a reliable processing capability which meets the specific requirements of different customers is a critical step in on-shoring manufacturing. This typically requires pilot scale demonstrations, for example, constructing a pressure acid leach pilot plant that runs from ore beneficiation through to the refining of high purity metal, reconstructing the entire flow sheet at pilot scale.
If this final stage demonstration occurs offshore, the chances of securing the scaled-up advanced manufacturing is very low. Companies can often struggle to access funding to enable this step. Many Australian critical minerals processing projects are therefore ‘stuck’ at this stage of the project development pipeline.
Shared infrastructure precincts have been successful in attracting investment
Australia’s critical mineral processing industry is at a very early stage. While capability in secondary processing exists within some companies and the research and engineering communities, there are very few operational projects. Industry needs to build the capability from the bottom up and attract foreign companies who can bring that capability with them. Australia’s metal smelting industries were largely developed in this way.
With a skilled and capable resources sector with low sovereign risk and substantial geological potential, Australia has an opportunity to attract advanced manufacturers and mineral end-users to establish operations in Australia. This will help create a domestic market for processed Australian critical minerals products, onshore higher value-added stages of production, and help build alternate supply chains for advanced manufactured goods in Australia.
Overseas experience suggests developing industrial ‘plug and play’ parks can attract foreign investors. Similar initiatives in competitor countries (for example, the UK, Germany, Malaysia, and Indonesia) have attracted investment from critical minerals processing companies seeking to offset their capital and operating costs. For example, the Indonesian Morowali Industrial Park has created a hub for mining, metal processing, steel manufacture and battery materials production. Investing businesses get the benefit of the port, power stations, and other infrastructure that were established to service Tsingshan’s steel operations.
A number of state governments have identified potential clusters which could support advanced processing and downstream manufacturing close to known mineral deposits.